How a SWOT Analysis can Help Your Business
2016 is just days away, and for many small business owners and entrepreneurs, the calendar change typically encourages goal creation, marketing brainstorming and business planning.
While best practice dictates that marketing planning, budgeting etc. be done in September for the upcoming year, for some, the month of December is an reminder to put on your thinking caps and begin drafting a marketing plan. If you're in that boat, I highly recommend including a SWOT analysis in your planning process.
What is a SWOT Analysis?
Simply put, a SWOT analysis includes details about your business's Strengths, Weaknesses, Opportunities and Threats. This exercise, even when repeated year-after-year, will prove useful to you because it forces you to think of internal and external factors that are currently or may eventually affect your business.
Here are some sample questions to guide you through the exercise:
- What advantages does your business have?
- What do you do better than anyone else?
- What unique or lowest-cost resources can you draw upon that others can't?
- What do people in your market see as your strengths?
- What factors help you "close the sale"?
- What is your organization's Unique Selling Proposition? (Otherwise known as a UPS, this is the unique thing that you can offer that your competitors can't. It's your "Competitive Edge." It's the reason why customers buy from you, and you alone. Some businesses may include this kind of information in their mission statement.)
- What could you improve?
- What should you avoid?
- What are people in your market likely to see as weaknesses?
- What factors cause you to lose sales?
- What opportunities are you aware of for the upcoming quarter, year etc.?
- What interesting trends are you aware of in your market or industry?
Useful opportunities can come from such things as:
- Changes in technology and target markets.
- Changes in government policy related to your field.
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- Local events.
A helpful approach when listing out your opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
- What obstacles does your business face?
- What are your competitors doing?
- Are quality standards or specifications for your job, products or services changing?
- Is changing technology threatening your business or how you contact leads or clients?
- Do you have bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
During this effort, it's important to consider the questions both from your personal perspective as well as your target demographic's perspective and your competitor's viewpoint. You may be surprised what you discover!